Transcript of "BusinessDecision - Know Your Market"

1.
Turning Data into Information
Small Business Growth and Development
CIVICTechnologies
www.librariesbuildcommunities.com
Copyright. 2007. CIVICTechnologies, Inc. Confidential and Proprietary.

2.
Turning Data into Information 2
Page
Part 1: What do small businesses need and want?
How do libraries meet the challenges faced
by small business?
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

3.
Turning Data into Information 3
Page
What do small businesses want? They want to be profitable.
1. Find new customers to grow
2. Identify the best location
3. Evaluate competitors
4. Control marketing costs by targeting direct mail and ad dollars
5. Meet regulatory and tax requirements
6. Learn how to manage finances
7. Learn how to operate a business day in and day out
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

4.
Turning Data into Information 4
Page
What do small businesses need to get what they want?
> Reliable, predictive information
Information to support their business plan
• Consumer market data
• Market segmentation data
• Geographic information systems mapping tools
Access to this information
• This positions the public library as the trusted intermediary to
bridge the data gap
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

5.
Turning Data into Information 5
Page
What challenges do small businesses face?
1. They don’t know what’s available
2. They don’t know where to find it
3. They can’t afford the time or money to access it
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

8.
Turning Data into Information 8
Page
Other database types
Business to business databases Focus on B-2-B relationship, not B-2-C
• DB Million Dollar Database
• InfoUSA
Original source databases Small business owners and entrepreneurs don’t
have time or interest in performing original
• Census
research
• Bureau of Labor Statistics
• Other federal and state agencies
Full text databases Articles are informational and inspirational and
provide models and case studies, but don’t find
• InfoTrac
new customers or the best place to locate a
• Newsbank store
Investment databases Great if you’ve already made your money
• Standard and Poor’s
• Morningstar
• Mergent
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

12.
Turning Data into Information 12
Page
Market potential
> By industry product
or service category
• Cross compare categories
• Determine if there is
sufficient market size
• Compare with a national
index
• Identify amount spent per
household and for all
households in a study
area
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

15.
Turning Data into Information 15
Page
Three examples of the 65 Tapestry market segments
Laptops and Lattes
• Residents are single persons who live alone or with a roommate
• Have a median income of more than $87,000
• Prefer to live in major metropolitan areas
• Choose to shop at upscale establishments
Aspiring Young Families
• Residents are young with a median age of 30 years
• Many are start-up families, either married couples or single parents, with children
• They live in large, growing metropolitan areas in the South and West
• Half are renters; many reside in townhouses
International Marketplace
• This market is the cutting edge of immigration
• Represents a blend of cultures and household types
• Most are renting apartments in multi-unit buildings, but over 30% have purchased a
home
• Primarily located in gateway states on the coasts
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

16.
Turning Data into Information 16
Page
Who uses market segmentation and what do they do with it?
> In a word, most big companies to be more profitable
Banking
• Profile customers by branch trade area
Retail
• Stock store merchandise by consumer type
Government
• Determine usage of services by population segments
Health care
• Develop community outreach programs
Insurance
• Create products by life-stage
Utilities
• Understand product usage by household
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

17.
Turning Data into Information 17
Page
And this is the dirty little secret of market segmentation
It is used by most large companies
> But not even known by small business
Public library distribution can change this equation
and level the playing field for small business
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

21.
Turning Data into Information 21
Page
Part 1 Summary
> How can the library meet the challenges faced by small
business?
1.Show small business customers what’s available
2.Show small business customers where to find it
3.Provide small business customers with access to information to
support their business plan
• Consumer market data
• Market segmentation data
• Geographic information systems mapping tools
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

23.
Turning Data into Information 23
Page
Case study background info
> “I found
BusinessDecision on the
local library’s web site!”
• Yoga studio
• Located in Los Angeles County
• New business owner
• Woman, married with two
kids 7 and 10
• Never before owned or
planned a business
• Compiled two 3” notebooks
of BusinessDecision reports
and maps plus her own Excel
tables
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

25.
Turning Data into Information 25
Page
How big is the market?
> Number of people in
the catchment area
• Range of data categories
• Tracks change over time:
Census 2000, current year
estimate, five year forecast
• Tracks counts across study
areas (e.g., radius, drive
time)
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

26.
Turning Data into Information 26
Page
How many people take yoga lessons?
> Market penetration:
percentage of people
who “buy” yoga services
• Demonstrates market share
as a percent of adults
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

32.
Turning Data into Information 32
Page
Market segmentation analysis using Tapestry
1, 3, and 5 mile radii around each competitor
Identify the top segments
Compare these to alternative locations to find one that matches
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

33.
Turning Data into Information 33
Page
Typical segmentation report
> One mile radius
around each
competitor
• In a one mile radius,
over half of the
market, 53.5 percent
of households are
“Trendsetters”
• The top three
segments account for
80 percent of
households
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

36.
Turning Data into Information 36
Page
Revenue model
How much revenue will a business make, realistically?
• This is one of the most difficult things an entrepreneur has to calculate
• With consumer market and market segmentation data, there is a reliable
way to figure it out
1. Market size = number of people in one mile radius x yoga market share
23,606 people x 5.9% share = 1,392 people
2. Number of visits per month = market size x participation frequency
1,392 people x two lessons per month x 12 months = 33,408 lessons
3. Projected revenue = number of lessons x price of lessons
33,408 lessons x $15 per lesson = $501,120 projected revenue
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.

37.
Turning Data into Information 37
Page
Part 2: case study conclusions
The library put information in the hands of an entrepreneur to
demonstrate the viability of a new business
Without the library, this patron would not have had access to the
information she needed to evaluate the potential business opportunity
“I found BusinessDecision through the local public library website. I was amazed at the detailed information
accessible to me, information I could not find elsewhere and, as it turns out, couldn’t have afforded on my own.
“BusinessDecision let me, an individual, take my business concept and test it through in-depth demographic and
Tapestry segmentation reports. The data I’ve gathered through BusinessDecision has given me the proof I needed to
develop my business plan and the confidence to seek financing to realize my dream. The library is providing an incredible
service to entrepreneurs like me by offering BusinessDecision.”
- Alexia Cirino
Library Patron, a California Public Library
Small Business Connections, June 8, 2007 CIVICTechnologies
ULC Audio Conference: Copyright. 2007. CIVICTechnologies, Inc. All Rights Reserved.